Growth slowed sharply to 0.3 per cent in the first three months of the year from 0.7 per cent in the previous three months.

Despite BOE governor Mark Carney warning only last February of the "twists and turns" heading into Brexit - nearly immediately proved true in mid-April when PM Theresa May called for general elections to be held on the 8th of June this year - the BOE remains optimistic over the growth outlook.

The Pound was down against most major currencies following the bank's announcements.

While the MPC warned that interest rates would need to rise to a slightly greater extent than implied by the current market yield curve, if the economy evolved in line with its projections, Tombs said the much lower forecast for inflation in two years' time "speaks for itself" and he continued to think that the MPC won't raise interest rates "until at least Brexit has occurred in early 2019".

However, the Bank said that wages, while they have remained flat in recent years, were going to "recover significantly" the next three years, with the wider economy also set to strengthen. Inflation is now expected to peak in Q4 2017 at 2.8%.

The Bank of England expects wages to start picking up in 2018 and inflation to ease back down - but only assuming Britain gets a new trade deal with the EU.

At the same time it cut its forecast for average earnings growth for this year to 2% from 3% pencilled in back in February.

In February BoE Governor Mark Carney warned of "twists and turns" on the road to Brexit.

But this economic improvement will really depend on whether there will be a "smooth" transition out of the European Union, the Bank said. Rising inflation and poor income growth were cited as the main reasons for consumers feeling the squeeze; reflected in disappointing retail sales data and a surprisingly steep drop in new vehicle sales.

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Despite this, we've already seen a number of members of the Monetary Policy Committee opt for higher rates and Forbes, McCafferty and perhaps Saunders may have pressed the case for increased interest rates at this meeting, but caution over exchange rates, market confidence and the political backdrop will have overruled.

The BOE's press release attributes the more rapid than anticipated uptick in inflation to its most recent level of 2.3 percent as of March - squarely above the Bank's 2 percent inflation target - to weakness in the United Kingdom currency, noting, "The projected overshoot (of the inflation target) entirely reflects the effects of the falls in sterling since late November 2015 on import prices".

The central bank trimmed its forecast of growth this year to 1.9 per cent from two per cent, but nudged up its forecasts for 2018 and 2019 to 1.7 per cent and 1.8 per cent.

The BoE has already said that certain MPC members other than Forbes are ready to hike, saying in the minutes of its last meeting: "Some members noted that it would take relatively little further upside news on the prospects for activity or inflation for them to consider that a more immediate reduction in policy support might be warranted".

Household spending, the economy's main driver, is starting to wilt as inflation pushes past the BoE's 2 percent target.

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